Gallup research tells us that 70% of the variance in employee engagement is driven by the local manager. When it comes to culture, it is leaders that are in the driver’s seat.
Culture is something that develops organically in organizations over time. But it is the collective behaviors of the leadership team that frame that development.
Traditional culture campaigns often focus on the behaviors of staff members. That comes further down the line. If the goal is to change or enhance the culture, you’ll want to work from the top down.
In Carpe Diem’s Culture Screen survey, we look at five elements of an organization’s culture – its priorities, decision-making style, leadership style, leadership culture, and team dynamic. All of these are driven by leadership.
Priorities
We start our assessment with an organization’s business and people priorities. Note that I say priorities as opposed to goals or values. Goals and values are aspirational – something we declare but don’t always act upon. Priorities are defined and validated by our actions on the ground.
To understand an organization’s priorities, we want to know its goals and values. But we also have to look at the tradeoffs the leaders are willing to make to achieve those goals and bring those values to life.
- Mission vs. margin
- Innovation vs. execution
- Growth vs. sustainability
- Work-life balance vs. 24/7 mentality
These are not binary decisions. An organization may find itself on the mission side of the spectrum in one instance and the margin in another. It’s where the leaders gravitate when something is at risk that indicates whether that particular goal or value is truly a priority.
Another focus here is whether leaders have both near- and long-term priorities. When leaders are only thinking about the week or quarter ahead, they tend to lock the organization into “fire-fighting” mode, severely limiting the thinking and actions of their teams and functions.
Decision-Making Style
An organization’s priorities frame the decisions that leaders make on a day-to-day basis. Based on those priorities, those leaders may be more or less likely to embrace change, to take risks or think outside the box, or to take preemptive actions to get out ahead of future challenges.
Additionally, the priorities will inform how decisions are made. An organization focused on growth and innovation will want to be agile and flexible in its decision making. A people-centric organization will tend to have more inclusive decision-making, with leaders seeking out input from team members and taking measures to secure their buy-in.
Leadership Style
Leaders all have their own individual styles and approaches. But there are behavioral norms baked into the culture of the organization that dictate how leaders interact with their teams and functions.
In some organizations, leaders are more open and accessible. They will engage more with staff members and get more directly involved with employee development.
Patterns also develop in terms of the extent to which leaders empower their teams, hold team members accountable, and provide recognition for the team’s efforts and accomplishments.
A key consideration with respect to recognition is how leaders balance praise and criticism. Real-time feedback is vital to performance. But leaders can go overboard with their critique, focusing primarily on the negative. This can have a chilling effect on employees and keep them from stepping out of their comfort zone.
Leadership Culture
Beyond leaders’ interactions with staff members, we also need to look at how they are interacting with one another as part of the leadership group. This is reflected in the leadership culture.
There are two main facets of the leadership culture. The first is the level of urgency that leaders apply to their work. We expect our leaders to challenge the status quo when needed and go above and beyond the parameters of their role in order to drive performance. Leaders would also be expected to act promptly and decisively in the event of a crisis.
But that is not always the case. Over time, leaders can fall into their own comfort zone, taking a more passive or risk averse approach. This mindset can then pass down to their units.
A second aspect of the leadership culture is the sense of cohesion among leadership team members. A concern in dysfunctional organizations is that leaders are focused more on protecting their own interests than driving the company’s agenda, creating or contributing to siloes or divisions across functions.
Team Dynamic
It is only after exploring the company’s priorities, decision-making style, leadership style, and leadership culture that we can truly understand the fifth element of the culture, the team dynamic, and appreciate what is happening on the ground.
That is not to suggest that staff members aren’t responsible for their own actions. But if we want people to feel more energized by work, to actively collaborate and reach out across functions, and to work through interpersonal conflicts – we want to first examine and address the leadership behaviors that are contributing to or getting in the way of those traits.
Team members tend to follow the example set by leadership. So, it is important for leaders to model the behaviors they want to see from others.
Modeling may just be part of the solution. An example would be where there is tension between functions. That could be because the leaders of those functions don’t get along. That’s the modeling component. Or it could be because the different functions don’t know or appreciate each other’s timelines and protocols. That may require additional actions from the leaders to facilitate communication and understanding between the departments.
Enhancing Leadership Behaviors
By shining a light on the culture, we can call out both the positive and more disruptive leadership behaviors and help leaders to see how they are impacting employee engagement and performance.
For some leaders, it is just a matter of self-awareness. Those leaders may simply be doing what made them successful as individual contributors. Or they may be following the lead of those leaders that came before them.
In other instances, there may be groupthink that develops across the leadership team, where leaders continue to engage in a certain set of behaviors even if they are no longer productive. They may take pride in the fact that “we’ve always done things that way at Company [x]” without considering the effect that may be having on the culture.
At Carpe Diem, these behavioral insights are typically introduced through workshops with the leadership team, and can be reinforced through training or 1:1 executive coaching.
Organizations who have reached certain tipping points – e.g., new executive leadership, new strategy, market disruption – may also want to consider whether they still have the right leaders in their roles. The organization may benefit from new voices with fresh thinking that aren’t tied down by previous behavioral norms.
These market insights from Carpe Diem Global Partners are gathered from the firm’s extensive client work with Board, CEO, CXO, and CHRO leaders in public and private multinational companies. For deeper, custom insights, contact Craig Kamins at ckamins@carpediempartners.com.